Burchetts Green had enjoyed the bank training course, but itwasgoodtobestartjng his rstrealjobinthecorporate lending group. Earlier that morning the boss had handed him a set of financial statements for The Hobby Horse Company, Inc. (HI-I). \"Hobbyr Horse,\" she said, \"has a $45 million loan 'om us due at the end of September, and it is likely to ask us to roll it over. The company seems to have run into some rough weather recently, and I have asked FurLePlatttogodownthere tinsaernoon and see whatis happening. It might do you good to go along with her. Before you go, take a look at these financial statements and see what you think the problems are. Here's a chance for you to use some ofthat stu'they taught you in the training course.\" Mr. Green was familiar with the HH smry. Founded in 1991), it had rapidly built up a chain of discount stores sell ing materials for crafts and hobbies. However, last year a number of new store openings coinciding with a poor Christmas season had pushed the company into loss. Management had halted all new construction and put 15 of its existing stores up for sale. Mr. Green decided to start with the sixyear summary of HH's balance sheet and income statement (Table 4.10). Then he turned to examine in more detail the latest position (Tables 4.11 and 4.12}. 1Whatappeai'tobetheproblemareas in HH?Dothenan cial ratios suggest questions that Ms. Platt and Mr. Green need to address